Top News
#1: Magic Eden Goes Mad
As the marketplace wars continue to escalate, NFT marketplace Magic Eden has a new strategy to help increase volume: its “Mint Madness” promotion. Rather than incentivizing bulk trading volume for art NFTs, Magic Eden is narrowing the approach to game NFTs from titles partnered with the month-long event. The idea is that games are starting to view free NFT mints as a promotional tool for gaining traction for their products, and Magic Eden is taking advantage of this by acting as the mint provider and then tracking NFT trading volume as a competition.
The promotion works like this: Magic Eden has potential whitelist candidates jump through some hoops like following @MEonPolygon on Twitter and then connecting their wallets, as well as their Twitter and Discord accounts, for a chance at being selected. Throughout the month Magic Eden will be going through the 12 participating games and randomly giving out free NFT mint whitelist spots to entrants, with news being delivered via Twitter to keep eyeballs on the feed.
There will be some limited public mints available as well for those that don’t make the whitelist, but chances are they will go extremely quickly. Planet Mojo was the first game in the promotion, and its free mints were exhausted in just four seconds. Considering these are free NFTs with incentivizes for marketplace trading, the NFTs of course end up swapping hands on Magic Eden shortly after minting.
So far, the promotion is doing its job of generating attention for Magic Eden and creating a bump in trading volume. The Planet Mojo “Champion Chest” NFTs have already seen 55,200 MATIC (about $58,000) in trading volume at time of writing. The second game on the list, MetaStar Strikers, sold out of its NFT mints in about two seconds, which have already generated 15.7,000 MATIC (or $16,600) in transaction volume for its “Founders Edition Box.”
The next on the list is a “Golden Pickaxe” NFT for Alaska Gold Rush, which will undoubtedly sell out just as quickly. The upside for those looking to pick up the NFTs off Magic Eden is that the initial free cost to minters means floor prices aren’t absurd — currently that price is less than $25. With royalties optional (but defaulting to “full”) on Magic Eden, it’s hard to say how much the promotion will financially benefit game developers, but considering the limited supply it seems like fairly cheap marketing even if only a small amount of the trading volume results in royalties.
Exact dates of each mint aren’t given out too far ahead, but so far they have been taking place three days apart and in the order given on the main launchpad page. With only 21 days left in the month after Alaska Gold Rush and 10 more mints listed (Shrapnel is on the list twice) it seems like Magic Eden will need to speed things up to every two days to keep pace. There is the possibility with the current pace that secondary volume for each individual game could drop off quickly as interest fades, which seems to be the case just by looking at the time gaps between sales increase for the older game in the list versus the fresher ones.
As momentum on each game slows though there is opportunity for the trading volume leaderboard to help balance that out as the slowing sales will likely reduce floor prices and make trading cheaper on the older collections. The leaderboard hasn’t been shared yet, but at the end of the month 20,000 in MATIC will be given out to the top 10 based on placement (4,500 to first place, 500 to 10th place). Hopefully there are measures in place to prevent wash trading (trading back and forth to yourself) from affecting the leaderboard. Unlike OpenSea’s recent 0% fee promotion, Magic Eden is still making 2% on all transactions, so it could easily end up making a decent profit as it’s already netted around $1,500 in MATIC from just the two games so far.
Ultimately, these kinds of promotions are healthier for web3, and especially web3 gaming, than recent some of the other marketplace stunts we’ve seen recently, like Blur airdrops. The promotion won’t guarantee a slew of quality players for the games being promoted, but it’s likely to at least capture some attention from web3 natives that may not have been aware of some of the more niche games on the list.
The FOMO behavior of the promotion and frenzy that comes with it will certainly draw more excitement and interest than simply airdropping NFTs into random wallets or giving NFTs away to an already captive Twitter or Discord audience. Magic Eden also benefits from this promotion as it’s primarily a vehicle to promote its recent expansion onto Polygon, after getting its start as a Solana-focused marketplace.
While game-specific NFTs are generally a smaller portion of secondary market transaction volume, the gaming angle here is a smart way for Magic Eden to capture mindshare on a blockchain that plans to host a significant number of games over the next few years. In some ways, this may even be a direct response to Fractal, another game-focused platform that recently ditched Solana for Polygon as well. There is even some overlap with Fractal’s Polygon launch partners like Blast Royale, Planet Mojo, and Tearing Spaces.
Despite the upsides, we don’t expect this promotion to help Magic Eden take significant market share away from OpenSea or Blur. We’re already seeing NFT marketplaces head in the direction of traditional e-commerce, in which a small number of major platforms control large swaths of online transactions. Right now, web3 natives are more comfortable doing comparison shopping and arbitrage, but as new people enter the space, there will likely end up fewer and fewer default destinations as competition wanes and the top marketplaces outlast their rivals. At some point, the funding helping drive much of the marketplace promotional competition will start drying up, and a winner will be decided by natural market forces driving network effects.
There is some opportunity for divergence into more specialized marketplaces around art NFTs, gaming NFTs, and gaming semi-fungible tokens, but if they all end up being “digital assets” that function similarly enough it might be hard for the differentiation to matter. The irony is that despite the decentralized nature of blockchains, we’re seeing more and more centralization among the winning platforms. So expect to see continued promotional “madness” throughout 2023.
#2: Illuvium Goes Beyond
The developers behind Illuvium launched a new NFT project this week called Illuvium: Beyond, despite not having developed more than a few private betas of its titular auto-battler along with an unfinished alpha of its Illuvium Zero land game.
The launch on March 7th represents “Wave 1” of the project which centers around “Illuvitars,” a PFP-like representation of the game’s Illuvial creatures. The Illuvitars are sold in packs called “D1SKs” and come in two flavors (Standard or Mega) that both contain two Illuvitars and three accessories, with all of these being considered “cards”. The overall point of the project is for players to collect, accessorize and organize Illuvitars into sets to get points on a leaderboard based mostly around rarity and spend diversity.
Illuvium pitches the project as a “collectible card game,” but Illuvium is being generous with that phrasing. It’s true that there is the collectible aspect, while calling these collectibles “cards” is a bit of a skeuomorphic stretch. Yet calling the competitive collecting system a “game” is overselling the true nature of the project. The collecting system does have some different elements to it that help make up a collectors total “score” which determines that collectors rank on a leaderboard system, but it’s more a measure of spend than any form of gameplay.
The basic concept is that the rarity of the attributes of the Illuvitar form a “Power Score” for that Illuvitar. You can enhance both the look and the Power Score by “bonding” it with accessories in five different slot types: Skin, Body, Eyes, Head, and Props. The bonding process actually burns both the Illuvitar and the accessories NFTs to create a new NFT that combines both and the process can be repeated for all five of the slots. This burning process means dressing up an Illuvitar is a permanent and unreversible choice. Illuvium may be considering this choice and large permutation of possible combinations to be reminiscent of gameplay.
The next layer that Illuvium considers to gameplay is around selecting Illuvitars to place in slots in a collection album. The process is referred to as “sleeving,” continuing the card metaphor. The album is broken into multiple types of sets based around different attributes or NFT types like Tier 0, Waves, Accessories, Backgrounds, Classes, Affinities, and Illuvial lines.
The idea is to encourage a broad collection of Illuvitars with different attributes to fill up the set pages. For example, the Turtle Illuvial Line collection page has spots for the three rarities (Common, Uncommon, Rare) of the three types of Turtles (Archie, Archos, Archeleon), making for nine total “sleeves” in the set page. Like much of the album, however, only part of the set is even released in this wave — the Archie line.
A single Illuvitar can at least occupy sleeve spots on multiple different pages if it fits the criteria, allowing its Power Score to contribute to multiple sets. That is basically the limit of the “game,” unless Illuvium decides to build yet another project letting collectors do something more with the their NFTs.
In the Standard packs the Illuvitars will be “Tier 0,” and in the Mega ones they will be “Rare” instead. The price difference is also significant, going from around $38 for Standard to about $190 for Mega. Illuvium states that the value difference between Tier 0 and Rare Illuvitars in terms of “Power Score” is on average 12x.
Buyers seem convinced by the idea that the Mega is a great value at less than 12x the price to heart as it sold out before even one fifth of the Standard D1SKs. For this four-day version of the Wave 1 sale (dubbed “Alpha Run”), there were a limited 20,000 of the Mega D1SKs and 100,000 of the Standard. It’s worth noting that the limited quantity of these packs during these first four days are considered “Alpha” packs and marked as rarer and sold at a higher price similar to a “genesis NFT”; they will be followed up with a cheaper version of the D1SKs over the next three months as the “Extended Run.” Illuvium plans to use this distribution plan for all six waves although the timeframes are subject to change.
While we don’t know the development costs for Illuvium: Beyond, there is definitely profit to be made both from the primary sales at $180 or more for Mega packs and from on-going secondary market royalties. Much like with the land sales prior we do expect a majority of the initial primary sales likely come from sILV2 tokens rather than Ethereum. Secondary sales of the Mega D1SKs have been at floor prices below the primary sale cost both before and after the 20,000 supply sold out, which leads us to believe some of it may be sILV2 purchases looking to sell the D1SKs for Ethereum at hopefully a profit.
The idea of being able to customize a PFP is a great and something more of those types of projects should aspire to, but in this case it comes across as a distraction for the Illuvium team. Illuvitars may help endear some of the community to the IP, but they ultimately don’t tie into a finished product. We’ve seen a lot of web3 games go through this cycle of making big promises for the actual game, only to end up creating a series of smaller mini-games or other ways to keep invested players occupied while the eventual finished product fails to materialize. In the case of Illuvitars, the team behind Illuvium is taking in additional funding on top of its already sizable investment especially from land sales. So it does have some benefit to the business.
But it’s still too early to gauge the effectiveness of the sale. The slow pace of Standard D1SK sales suggests they won’t sell out prior to the end of the Alpha Run unless whales decide to sweep up the remaining supply in hopes to flip them in the future. While the Mega D1SKs did manage to sell out in just two days, the large supply of them on the secondary market means more demand for flipping than ownership, as is typical for many limited supply NFT projects.
Undoubtedly, there are collectors out there who will have fun with “competitive collecting,” but there’s a good chance calling this project a game could backfire on the Illuvium team given the lack of public progress on the promised games and delays to the Illuvium Zero alpha season 1 release. The two private betas of the auto battler were had decent production quality, but their simplicity given the amount of development time and resources required was a disappointment. The Overworld beta also failed to impress. Illuvium as a whole has yet to face a major roadblock, but we do have to question whether the resources spent on Illuvium: Beyond could have been put to better use on the main Illuvium project, or at least on better something incorporated into it.
Upcoming Game Announcements
- Champions Ascension announced sign-ups for a 64-person alpha tournament. (Link)
- MonkeyLeague announced a partnership with IndiGG to expand its Indian player base. (Link)
- Infinity Arena announced a Battle PvP Betting mode open beta from March 20th-26th prior to a mainnet release on March 31st. (Link)
- Chronos: Dawn of Time launched a PvP elimination tournament. (Link)
- The Glimmering, an on-chain TTRPG, announced the launch of Phase 2 of its Genesis Collection for March 30th. (Link)
- Com2us announced a July release for Summoners War: Chronicles on the C2X blockchain after its web2 launch this month. (Link)
- Symbiogenesis released its website with detailed info about the Square Enix web3 game. (Link)
- Stella Fantasy opened pre-registration for its web3 anime ARPG. (Link)
- Eternal Dragons launched PvP for Genesis holders. (Link)
- DigiDaigaku announced the start of Dragon Essence airdrop claims. (Link)
- Parallel began wave 2 of its closed alpha for invited players. (Link)
Live Game Announcements
- Mini Royale: Nations launched a Faraway Map Creator Program to reward map makers for creating environments for both the FPS game and the related Faraway Land city building game. (Link)
- Immutable announced a partnership with Warner Bros. Discovery Sports to port its Blocklete Golf game from Flow to Immutable. (Link)
- Nine Chronicles announced a “Just Grrrind it!” event running from March 2nd to 16th. (Link)
- Axie Defenders of Lunacian Land (DoLL) launched Season 1 with SLP prizes for the top 200 players. (Link)
- Arsenal, an FPS on BSC and Polygon, announced a “Fighting Pass” and seasonal competition to help boost the player base. (Link)
- Ev.io announced a new “Snipe the Streamer” mode to let viewers and streamers play together. (Link)
- Axie Infinity: Origins launched Season 3 with increased SLP earnings. (Link)
- Sunflower Land announced a Solar Flare seasonal event. (Link)
Funding Announcements
- VitalXP raised $3 million for its shooter Lowlife Forms in a pre-seed round led by Streamlined Ventures and Marbruck Investments. (Link)
- Redeem raised $2.5 million for a phone number-based NFT delivery platform in a pre-seed round led by Kenetic Capital. (Link)
- Animoca Brands Japan announced an undisclosed investment in Rainshine Global, which bills itself as a “creator-first digital entertainment company.” (Link)
- The Sandbox announced the acquisition of German gaming studio Sviper. (Link)
Ecosystem Updates
- Immutable announced an 11% staff cut to help extend its cash reserve runway. (Link)
- Square Enix announced the replacement of its President which could affect its web3 strategy going forward. (Link)
- Shopify and Thirdweb announced a partnership for a web3 e-commerce toolkit. (Link)
- Binance launched an AI image generator that can mint to NFTs called Bicasso. (Link)
- Animoca Brands announced a series of three NFT licenses meant to protect creator royalties. (Link)
- NBA China and Ant Group announced a partnership for basketball-themed NFTs targeted at Chinese basketball fans. (Link)
- RTFKT and Ledger announced a partnership for enhanced web3 security and education through collaborative programs. (Link)
- HyperPlay launched its web3 game launcher in early access. (Link)
- Animoca Brands signed a Memorandum of Understanding with Manga Productions to help expand web3 content to the MENA region. (Link)
Notable Market Moves
- While ApeCoin fared about average in its price loss for the week, it’s interesting to note that the token is very close to its 90D price. That indicates at least some level of longer-term stability given how well it’s weathered recent ups and downs. ApeCoin has also been out for almost a year and like most tokens, it’s current price won’t look great in comparison. That being said, it has managed to get some market traction and occasional utility despite The Otherside being nowhere near release.
- Axie Infinity’s AXS token may be down quite a bit over time, but it’s doing better than expected considering the pretty heavy collapse of Sky Mavis’ game and need for a rebirth in Origins combined with some strong AXS supply inflation around token releases and land rewards.
- STEPN’s GMT token did finally hit the one-year mark and while it technically looks good compared to its initial price, the token has fallen far from its all time high of $3.83. Much like AXS though, it’s doing better than it should be considering the collapse of its economy.
- As always, we recommend looking and thinking long term. This year started off strong and has seen a bit of a correction in the months since, but interest in web3 seems resilient enough for a bounce back at some point in 2023 or early 2024, although it may not reach previous highs without the right macroeconomic conditions to support it.
Content Worth Consuming
- Asia: The Engine for Blockchain Gaming (CMC Research) — “Asia’s gaming market is promising. It is not only the largest market in the world but brimming with growth potential. The 1.7B players in this region make up 55% of the world’s total gamers, generating $72B, or 52% of the world’s annual gaming revenue in 2019 (Source: Newzoo, IDC). Its salient per capita GDP growth will accelerate in-game purchasing power, further driving up the market share in the global games market. All these explain why Asia is widely considered the driving force to propel the global gaming industry forward for the coming decades.” (Link)
- An Adventurer’s Guide to the Bitcoin-Based Ordinals NFT (NFT Plazas) — “Now that you have a wallet that can hold and manage inscriptions, let’s talk about resources that allow you to make your own inscriptions. There are two that have really risen to prominence in these early days. The first one is gamma.io. Gamma was one of the first out of the gate offering ordinal minting services, and they have been rapidly developing new tools. Their basic service is an incredibly simple 5 step process that involves choosing the type of data (single image, or text), drag and dropping data to be uploaded and inscribed, fee estimation for the inscription, giving your ordinal compliant wallet address, and finally payment for the inscription. Its really simple once you have the wallet figured out. In their recent tweet, they described some new functionality including minting in bulk (multiple inscriptions at the same time), linking inscriptions to higher resolution assets that are hosted off chain, and generating a dedicated collection page for users.” (Link)
- The art of reigning in royalties (Nami) — “One problem with allowing Secondary Sales is that digital copies are identical, so it is crucial to ensure that a sale is a transfer and not a copy. Steam, for instance, could enable games to be resold on its marketplace, validate the transfer, and receive a profit from the transaction via a marketplace fee. However, there is a distinction between a royalty and a marketplace fee: royalties go to the game publisher/developer, whereas marketplace fees go to the facilitator, like Valve.” (Link)
- DookeyDash lessons and @OthersideMeta roadmap in NFT Paris (Twitter thread) — “Lessons from Dookey Dash: Made the game as simple as possible, Skill-based mint endless runner, Holders delegates to friends and family, Result: Yuga Ecosystem grew 40%” (Link)
- Manish Agarwal: India x Web3 Gaming (Naavik Gaming Podcast) — “In this episode, Manish Agarwal – ex-CEO of Nazara Technologies and founder of IndiGG, a web3 gaming DAO focused on India – joins Naavik co-founder Aaron Bush to discuss: #1 What guilds initially got wrong, why he prefers to not use the term “guild,” and how India might become a digital asset factory. #2 The size of the web3 gaming opportunity in India, and why India could be a uniquely effective market for web3 gaming. #3 Learnings from working in a DAO - the underappreciated benefits and the ongoing challenges. #4 What IndiGG’s strategy is going forward, plus his views on what he looks for in partnerships and games.” (Link)
- Bitcoin NFTs, CSGOs Success & Gaming NFTs v2.0 (Future of Gaming) — “In this week’s FOGcast, your hosts Nico Vereecke and Philip Collins are joined by special guest Tim Cotten. Tim is the CEO and Founder of Scrypted. We talk about CSGOs success, how important competitive play/esports is to games, what Bitcoin NFTs (aka Ordinals) are, and what the future of Gaming NFTs looks like.” (Link)
A big thanks to Devin Becker for writing this update! If Naavik can be of help as you build or fund games, please reach out.
